“This brings the government's total investment in the RMBS market to $20 billion since late 2008, and continues our strong support for this vital funding market that helps smaller lenders compete with the big banks," Mr Swan said in a statement.

In November 2008, the federal government pledged $8 billion of funding to non-bank lenders, via the AOFM’s RMBS investment program.

The funding was intended to sustain smaller lenders reliant on securitisation following the global financial crisis when demand for RMBS evaporated.

In October 2009 another $8 billion was allocated to the AOFM, which has invested $12.7 billion of the total $16 billion to date.

The $4 billion cash injection comes at a time when the RMBS markets are finding their feet with more non-AOFM bond issues receiving private support.

This week over $4 billion of RMBS has been issued with less than $150 million being provided by the government office.

The year’s three largest deals totalling $5 billion were all sold without AOFM support – by Commonwealth Bank and Westpac Banking Corp, which are both ineligible to access the program, and ME Bank.